Welcome everyone and thank you for joining us on this earning call today as we present our second quarter results for 2026. My name is Vincent Clerc, I'm the CEO of AP Moller Maersk and with me in the room today is our CFO, Robert Erni. Let me start with the overall highlights for the second quarter. At the macro level, market demand continued unabated despite the disruptions from the war in the Gulf, driven by Far East exports on almost all trade lanes. Exports from the Far East grew for the third consecutive years while the backhaul volumes were stagnant or negative. This has led to significantly more imbalanced trade flows and increased congestions in various regions including Europe, the East Coast of South America, West Africa and the Middle East as volume levels are challenging the limits of ports and landside infrastructures in these regions. These bottlenecks quickly translated into significant and sustained increases in the spot rate for mid-May, which not only had a significant effect on this quarter, but we expect will affect the outlook for the rest of the year, which I will get to shortly. If we look at the financials, on the back of higher spot rates in Ocean, we delivered an EBITDA of $3 billion and an EBIT of $1.6 billion. Free cash flow turned positive again at $549 million, supported by higher earnings, albeit partially offset by a build-up in working capital driven by higher receivables as a consequence of higher rates and by bunker inventory because of higher energy prices. As you may have seen, we have upgraded our guidance for the full year. Based on market volumes growth of about 4%, we now guide for an underlying EBIT of 4.5 to 6.5 billion dollars and a positive free cash flow. We'll return to the guidance later in the presentation. But looking at the operational highlights by segments, in Ocean, we leveraged the agility of our network and made the necessary operational adjustments to adjust to the new situation in the Middle East and successfully increased volumes in other corridors. Weekly volumes are now consistently above pre-war levels. As we indicated last quarter, we successfully implemented commercial measures during March to recover elevated costs linked to the Middle East situation on contracts as well as on our spot business. Separately, the continued strong market demand and more imbalanced trade flows have led to increased congestions in multiple geographies and a second round of increase in a spot rate from mid-May. On the Red Sea, we have gradually been reintroducing services through the Bab-el-Mandeb Strait, with four services to date, the first one being announced on July 6. These make up about a third of the volumes that would ordinarily be transiting through the Strait and the Suez Canal. We continue to monitor the security situation in the region and are prioritizing the safety of crews, cargo and vessels in every transit that we make, and in the decisions on the return of other services. In logistics and services, the broad commercial momentum that the team has built over the past quarter supported growth across the portfolio. We saw continued margin improvement in both of our new segments of forwarding and landside, which contributed to further EBIT margin improvements to 5.1% for this quarter. The Gulf region has been impacted by the effective closure of the Strait of Hormuz, but we have managed to protect our customers' supply chains through the use of land bridge solutions. In terminals, we continued to grow the portfolio through a new greenfield investment that we announced in Da Nang in Central Vietnam. And as far as the existing portfolio goes, we delivered strong top-line growth while demonstrating disciplined cost control to drive improvement in both profit and margins. Now looking at the strategic priorities we had set for ourselves at the start of the year starting with Ocean. On Grow we have delivered good volumes growth at around 4% on the back of strong market demand and operational delivery as we quickly adjusted for the disruption in the Middle East. On protect our high asset turns, the volume growth have outpassed the fleet growth by 2% points thanks to the efficiencies that Gemini has delivered. Utilization remains very high at 96% with strong discipline in our fleet management. Gemini is now fully in the base so future asset turn uplift will likely be less pronounced, meaning that volume growth will be more in line with fleet growth in the coming quarters. Moreover, this with utilization already at a high level, the task for us will be to ensure that we have the capacity to grow, and we will use various levers to ensure that we continue to do so. On focus on profitability, higher spot rates from the strong market demand and the ensuing congestion drove strong ocean earnings for the quarter. The cost increase from the Middle East conflict on contracts was recovered through surcharges and bunker formula. Finally, with Gemini now fully implemented for a 12-month period, we can confirm that the ocean cost benefit came in at about 950 million dollars, just above the upper range previously communicated of 7 to 900 million dollars. Turning to logistics and services, this quarter we have introduced the new reporting structure that we announced earlier in the year. Going forward, we will report logistics and services across three segments, namely forwarding, solutions and landside. At high level, forwarding comprises air and ocean forwarding products, while solution comprises contract and lead logistics products, and landside comprises inland and ground freight products. This change is designed to give greater value for customers through clearer and better product categorization, simplify our logistics and services portfolio and organizational structures internally, and improve comparability with our peers in the industry. Through this, we will also give you a better view and understanding of where growth and margin progressions are coming from across the portfolio. As you will recall, our priorities in logistics and services are to improve growth and accelerate margin improvement. On the first priority, the business delivered very strong revenue growth of 15% in the quarter, driven both by volume growth in most products as well as higher rates. The high growth this quarter is a testament to the growth platform that we have been building over the years. And whilst we are pleased with the growth over the past couple of quarters, we are certainly not complacent and continue to work hard to grow this business sustainably. As I mentioned, land-bridge solutions helped mitigate disruptions from the Middle East situation, illustrating the value of the integrated model for our ocean customers. On the margin improvement, we continue to deliver progress, with this quarter being the ninth consecutive quarter with year-on-year EBIT margin improvement. Our margins in forwarding and landside are strong, but we have to acknowledge that solutions still need improvement. The focus here is on converting the warehousing pipeline, reducing white space, and improving operational efficiencies as the new business is worn and ramps up. Overall, the business has shown that it can grow and improve margins at the same time, and these remain key priorities for us for the remainder of the year. Turning to terminals, the priorities remain to grow through existing and new locations and to maintain long-term profitability. The segment continues to perform well in that regard. It delivered strong revenue growth of 11%, driven mainly by revenue per move, illustrating the strong pricing power on the terminal side now as most terminals are full. New locations, including Rijeka in Croatia, are ramping up and helping compensate for volume impacts from disruptions in the Middle East, most notably our lower volumes in our Gateway terminal in Bahrain. We also continue to expand our portfolio with our greenfield investment in Da Nang, Vietnam. I'll add a few more words on this one very shortly. On profitability, terminals continue to deliver a strong return on invested capital of 14.8% while at the same time investing for growth. As we have signals, with the series of new investments we undertake, we expect some pressure on the ROIC during the build-up phase, but return on the existing portfolio will remain strong. Let me briefly highlight the Da Nang facility, which is an excellent example of the type of long-term infrastructure investments we want to achieve in APM terminals. APM terminals, together with our local partner Hateco Group, won a competitive tender process to develop a new multi-user terminal in Da Nang in central Vietnam. The port is strategically located in a region of Vietnam that is growing fast and is poised for long-term economic growth. The concession agreement with the Da Nang government gives our consortium exclusive rights to operate and expand Da Nang container ports for 50 years. This builds on the partnership with Ateco following the opening of the Hai Phong terminal in North Vietnam last year. The terminal will include 8 deep water berths with a total throughput capacity of more than 5.7 million TEU per year once fully built out. Our terminal will serve the growing Central Vietnam Gateway market as well as the neighbouring countries of Laos and Cambodia, Thailand and Myanmar as indicated on the map. The phase 1, comprising birth 1 and 2, will already go live in 2029. This is exactly the type of locations where we see long-term value creation, a strategic gateway for a growing market and an opportunity to build a state-of-the-art green and smart container terminal with a partner we know well. Before I hand over to Robert for the financial review, let me take a step back and talk more broadly about the developments in the ocean markets that have led to the change in outlook and financial guidance for the year. Container market demand has been extremely resilient, this growth being driven by exports from Asia. This has continued relentlessly despite various events such as the war in the Middle East or a new round of tariffs. Demand out of Asia grew 6.2% in Q2 alone and our weekly volumes today are above what they were prior to these events. This is not a pull forward, but real underlying demand and has led us to increase our expectation of growth in the container market from 2-4% earlier in the year to around 4% at the end of June. Additionally, that growth continues to be imbalanced with head-hold growth far outpacing back-hold. This means that terminal volumes are growing far faster than container market volume growth given the need to return an ever increasing number of empty containers on the back hole. This growth and increasing trade imbalances comes on the heels of about 15 years since the financial crisis where investment into terminal capacity has lagged. With market demand growing faster than terminal capacity, we were bound to hit a bottleneck at some point. To illustrate this, cumulative head hole growth from the Far East over the past three years, so since 2024, has now been around 25%, with the cumulative global terminal capacity growth only at 10% over the same period. This clearly shows the extreme challenges that some terminals are facing today. Many of them are completely full, resulting in growing congestions in some of the key nodes of our network, which is impacting the global network and not just the local situation because of their criticality. The effect of these disruptions will not be linear, and when a key node like Shanghai, which today has a 12 days waiting time, is affected, this will result in sharp rises in rates. Given the resilience of demand, the degree of underinvestment into terminal and the time that it will take to bring terminal capacity online to match these demands, it means that rate events such as what has happened since May will become more frequent in the years to come. As we look at this year, this is what we've been seeing. The combination of strong head-hold demand led to increasing congestions in many key ports, which in turn led to sharp increases in freight rate and finally led to our upgraded guidance. In effect, the bottleneck in the supply chain is now moving from ships to the land side. And this cannot be de-bottlenecked quickly. And so we believe that we are seeing right now a structural change with the rate environment becoming more benign, albeit still with a lot of volatility remaining. With that broader market perspective, I will now hand over to Robert who will take you through the financial review.

Thank you, Vincent. We had a good second quarter, with results stronger in comparison to both the prior year and the first quarter. This performance was driven by all three segments, but in particular ocean, as higher spot rates and volumes translated into better earnings and stronger cash generation. We delivered revenue of $15.8 billion, up 20% year-on-year, supported by strong demand in the container market, higher spot rates in ocean, and continued growth across all our segments. The strong revenue growth translated into higher profitability. We delivered EBITDA of $3 billion and EBIT of $1.6 billion, driven mainly by ocean, while logistics and services and terminals also continued to perform well. Free cash flow was positive at $549 million compared with negative $373 million last year, reflecting the stronger earnings. Our balance sheet remains strong with $18.5 billion of cash and deposits and a net cash position of $1.5 billion. Turning to cash flow, the stronger results also translated into improved cash generation in the quarter. Operating cash flow was $2.3 billion supported by EBITDA of $3 billion. Relative to EBITDA, this implies a cash conversion of 75%. The lower cash conversion compared to the last quarter was mainly due to the increased working capital reflecting higher receivables following the increase in ocean rates and higher bunker inventory because of higher bunker prices. Gross capex was $931 million, in line with our annual guidance, while repayments of lease liabilities amounted to $863 million. After all of this, free cash flow was positive and better than both last quarter and the same period last year. In addition, we returned $367 million to shareholders during the quarter, of which the majority was through the ongoing share buyback program. As I mentioned, the increased earnings was mainly driven by Ocean, so let me spend a few minutes on what happened during the quarter. Revenue increased to $10.5 billion, up 23% year-on-year, mainly driven by rates and further supported by good volumes. Average loaded freight rates increased by 22% year-on-year and 32% sequentially, driven by strong spot rates across most of our trade clusters, particularly Latin America and inter-Asia. Loaded volumes increased by 4.1% year-on-year to 3.4 million FFE, supported by strong market demand driven mainly by Far East exports. Despite various cost headwinds, unit costs at fixed energy decreased by 1% year-on-year. Note that if you exclude the positive impact from the extended useful life of our vessels and a number of others. was mainly driven by the strong development in spot rates, while the commercial measures with contractual customers compensated for the higher operating costs resulting from the Middle East disruption. Finally, gross capex was $663 million, and why it's lower than last year remains within the scope of our annual guidance. The year-on-year improvement in ocean earnings becomes clearer when we break down the main moving parts of the bridge. The largest positive contributor was freight rates, which alone had a positive impact of around $1.6 billion on EBITDA. This included compensation for higher bunker costs, elevated insurance premiums, longer dwell times, as well as other transshipment and network costs associated with contingency routing. Strong volume growth also contributed positively, adding $185 million. These benefits were partly offset by significantly higher bunker prices following the oil price surge back in May. Bunker prices were up 44% year-on-year, resulting in a negative impact of around $612 million. Container handling costs also increased, mainly reflecting congestion in terminals and higher storage costs across the network. Network costs were broadly stable as higher port, charter and transshipment costs were offset by 4% lower year-on-year bunker consumption owing to Gemini network efficiencies. Taking everything together, the strong spot rate environment and continued volume growth more than compensated for the elevated cost base during the quarter. Turning to logistics and services, logistics and services continued to make steady progress during the quarter. The business is growing and importantly continuing to improve profitability at the same time. Revenue increased by 15% year-on-year to $4.2 billion driven by volume growth across most of the portfolio. EBIT was up 24% to $217 million, up both sequentially and compared to the previous year. Likewise, the EBIT margin increased to 5.1%. The improvement was driven by top-line growth, productivity gains, cost discipline, and continued efficiency improvements across the business. This was also the ninth consecutive quarter of year-on-year improvement in EBIT margin. Reflecting continued operational progress across the portfolio. As we said before, our focus remains on profitable growth and continued margin expansion, particularly in the parts of the portfolio where we still see significant improvement opportunities. On a segment basis, Landsight was the strongest contributor to margin improvement, benefiting from land bridge solutions, Overall, this was a good quarter with revenue growth of 15% and debit growth of 24%. But we are not complacent and continue to target further growth and improved profitability. So looking at our new segments performance across logistics and services, the performance differs across logistics and services. We continue to see strong performance in both forwarding and landside, where revenue growth has translated into solid profitability and margin progression. Forwarding delivered revenue growth of 32% and a debit margin of 6.4%, supported by good development in both air and ocean forwarding activities. Landsight also delivered a strong quarter with revenue growth of 14% and an EBIT margin of 6.3%, reflecting solid execution across the portfolio. The picture is different in solutions, where revenue increased by 11% but profitability remains too low. The EBIT margin decreased to 1.7%, which primarily reflects white space associated with new warehouse capacity, together with the slow conversion of the commercial pipeline. As a result, our focus remains on improving pipeline conversion, increasing utilization across the network and reducing white space costs. While there is still work to do in solutions, the performance in forwarding and landsat demonstrates the earning potential of the portfolio when scale, productivity and disciplined execution come together. Overall, the message from this slide is that logistics and services continue to move in the right direction, with the next stage of marginal improvement coming from improving the profitability of solutions. The final segment I'd like to cover is terminals, which once again delivered a solid performance during the quarter. Revenue increased by 11% year-on-year to $1.4 billion, supported by both volume growth and higher revenue per move. Revenue per move increased by 7.1%, reflecting higher rates and increased storage revenue. At the same time, volumes increased by 2.2%, driven mainly by North America and the continued consolidation of Gemini volumes into Lazaro Cardenas. On the cost side, cost per move increased by 5.3%, mainly driven by labour inflation across the portfolio. Taking these together, EBIT reached $458 million, equivalent to an EBIT margin of 31.6%. Compared with last year, absolute EBIT is broadly stable, while the margin decreased. It is important to remember that the second quarter of 2025 benefited from a positive joint venture one-off of $45 million. Excluding that item, the EBIT margin was roughly stable year-on-year despite the inflationary cost environment. Return on invested capital was 14.8% compared with 15.4% a year ago. The slight decline reflects the ramp-up of new investments where capital is employed ahead of the full earnings contribution. Gross CapEx was $122 million compared with $141 million in the same quarter last year. Overall, the business continues to combine resilient earnings, attractive returns and disciplined investment in future growth. Having reviewed the performance across the business, let me finish with our updated outlook for the year. We continue to see a fundamentally stronger and tighter market backdrop than we expected at the beginning of the year. Since our June guidance upgrade, the market dynamics Vincent described have become more evident, reinforcing our confidence in the outlook for the remainder of the year. Based on the strong first half performance, better visibility for the remainder of 26 and our continued expectation of container market volume growth of around 4%, we are upgrading our financial guidance for the full year. We now guide for our underlying EBITDA of $10.5 to $12.5 billion, underlying EBIT of $4.5 to $6.5 billion and a positive free cash flow. Our cumulative capex guidance has remained the same. It stays at 10 to 11 billions for 2025 to 2026 and the same for 2026 to 2027. With that, we conclude the financial review and will proceed to the Q&A. Operator, please go ahead.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Question is on the phone or request to disable the loudspeaker mode while asking a question. We kindly ask you to limit yourself to one question per turn and to rejoin the queue for further questions. Anyone with a question may press star 1 at this time. Our first question comes from Parash Jain, HSBC. Please go ahead.

Thank you for taking my question and congratulations on a solid set of results, Vincent and team. My question is that if you can help us understand your decision of returning to Suez Canal, although gradually. What has changed in the last several quarters or years? Because if anything, what we have seen is heightened We have not seen a similar move by many of your industry peers also. So if you can help us guide, how shall we think about this? Is it a beginning of bringing all the vessels into it, or you are testing the water with the few vessels at this point of time? If you can share any color. Thank you so much.

Yes, thank you. Thank you for the question. So we have today about a third of the volumes or a third of the services that we normally would have going through the canal that are sailing through the canal in both directions every week. And that is the part of a gradual return, full return through Suez. All the analysis that we make and all the stakeholders on the military and intelligence side that we speak to will tell us that as it is today, The conditions for a full return through the Red Sea are met and that is why we are sending these services through. We don't test the water, we don't compromise on the safety of our crew, on the safety of our ships or on our customers cargo. But we feel that these, we believe that these conditions are met and that the recent developments in rhetorics and attacks on the ground from the Houthis are targeted at different segments and different products than what we Boussard Boussard Every day we can start to decide to go back around the side of Africa if we felt that the security situation would change. So for us, we will see, we will move towards a gradual full return to Bab el-Mandab and Suez.

Thank you so much and all the best.

The next question comes from Christian Nivelko, UBS. Please go ahead.

Hi, thank you very much for taking my question. I have one question on ocean capital allocation for the next few years. If I analyze your order book and the age profile of your fleet, I calculate that you're going to have roughly around 12% market share in ocean by 2030. I believe it used to be 18-19% pre-COVID. You also flagged today the structural congestion that helped ocean rates. So I guess my question is, in terms of capital allocation, how should we think about the next couple of years? Are you happy with having just 12% market share in a few years, or do you think you need to step up and allocate more capital to auction? Thank you.

Thank you, Christian. It's a very good question because, as I mentioned in the presentation, what we have been able to do with Gemini is actually break this and be able to gain and carry more volumes on a fleet that is growing slower than we're actually able to grow the volumes. But with the current utilization and asset turn, we're starting to reach the limit of what the current fleet can do. And if we want to, if we believe that the rate environment is going to be more benign in the years to come because of the land side bottlenecks that we see and that we want to protect our position, then we will need to continue to renew our fleet and to invest a bit of capital as well into maintaining not only the replacement of the fleet, but having some level of fleet growth in there.

The next question comes from Alex Irving, Bernstein. Please go ahead.

Hi, good morning. A bloody question to the previous one. So, King is a starting point in sufficient terminal capacity worldwide. What does that mean for the evolution of global fleets? You can all see the record high order books, Are we right to think that fleet growth in here basically just takes down asset productivity because there is not the terminal capacity to serve the expanded amount of ships in the ocean? Or do you think that we end up with capacity getting built and ultimately ships do result in higher capacity, higher throughput, higher container moves, placing pressure on freight rates? I'm just trying to understand that dynamic a bit better. Thank you.

Let me try to see if I can answer that. We saw during COVID that when the market volume suddenly increased, we started to hit or to stretch the limits of what the land side could absorb. And you will remember the long queue that there was in Los Angeles and in many other places around the globe as a result. That's simply because at that time we hit the ceiling of what the land site could absorb. The normalization after COVID basically alleviated that and we thought we would be free for this for quite a while because of the normalization. What has happened is over the last three years, The exports out of the Far East have grown by the 25% that I mentioned in there. And we are now getting to gradually to a place where some of the key nodes that we have, the big ports that we have in our network, they are back into a situation where we're stretching the capacity of what they can cope with. And the fact that trade has become more imbalanced means actually that the demand for volumes and many more.P Moller Water levels on the Rhine that disrupt the ability to move containers inland, whether it is trucking power in Brazil. You have different things like this that only illustrate it's not just a terminal thing. The whole land side has been underinvested compared to the growth that we have had. Investment in ships have followed, maybe even have been ahead of demand. If you look at the order book, But the bottlenecks that we have on the land side are more sticky and we're starting to feel them. And it's really hard to forecast when we start to have this. But I can give you the example today. The largest port in the world is Shanghai and ships take 12 days to get through because of how congested and full the port of Shanghai is. And that's when they need to load the cargo. When they arrive in Brazil and they have to go through Santos or they have to go through Jeddah in Saudi Arabia or through the north continent of Europe, they also get delayed because the ports and the infrastructure there is also stretched to the maximum. And so we will hit those and we will see raid events much more frequently. And the other thing that COVID has changed is when these rate events happened, what is the magnitude of the changes in freight rate and the speed at which they filter through? And you see this clearly if you start comparing the standard deviations of SCFI post-COVID with before COVID, it's very, very different. It's very hard to forecast, hence two profit adjustments in six weeks. But when it's there and it's becoming more and more frequent that it's there and supported by the strong market that we see today, then you will see more of that. What would need to happen for this not to be here anymore is either a significant weakening of demand, which We believe it could happen after an energy shock and the Gulf War earlier in the year, but hasn't happened. Or catch-up investment round in infrastructure to increase terminal capacity and to increase land-side capacity, rail, truck, waterways, so that we can move this more fluidly across the supply chain. And you will know that all of those will take a long time. So I think that as long as we're having the type of demand that we're having today and we need to invest in landside capacity to alleviate these bottlenecks and until then we'll see these bottlenecks as a common feature, not constant, but common feature of the markets that we operate in.

Alright, thank you for the detail.

The next question comes from Lars Heindorf, Nordea. Please go ahead.

Morning, thank you for taking my question and also congratulations on the strong results. I'm trying to get my head around the rate development in the second quarter, which I think surprised most people. If we look at sort of average between most of the leading rate in disease, they're up on average by, I don't know, 30, mid-30s, something like that. You increase your average ocean rate by 32% quarter on quarter. But if you look at most of the peers, 1, HAPEC, 00, CMA, they are by an average around about 13% quarter-on-quarter. And so basically the question is, have you done something different this quarter which ensures you this, I mean, quite significant outperformance versus the peers in terms of the quarter-on-quarter rate growth? And also, if yes, I mean, is this something that will last or is this sort of temporary? Again, maybe sort of alluding to what we can expect into the third quarter.

Thank you, Lars. It's hard for me to comment on what competition has done. What I can share with you is what we have done and why I think that we are very proud of the quarter, because the quarter actually rests on a lot of work. The first thing is to really leverage very quickly the redeployment of assets that were suddenly idle because of the situation in the Middle East and redeploy them productively so that you maintain the volume and you keep your costs under control. And I believe that we are today The other thing is we have invested for a long time in digital solutions for the spot rate and the spot market which allow us to react to these sharp rate events. I think faster than anybody in the market and this allows us I think to act with extreme agility in a world that is more unpredictable and where the changes are more and more meaningful because there's no elasticity in demand so when you start to hit the ceiling the impact on rates becomes extremely big and so it means something how quickly you can act on it and how quickly you can capture it. That's what I think. I don't think at all that we can abstract for market reality. Over time, the market rates are the market rates. But when market is very volatile, the ability that you have to adjust to that volatility faster than anybody else is a competitive advantage. And I think that tentatively what I see in the numbers today say that we've done a really good job this year.

If I may, just a brief follow-up. Should we then expect that your rates will be more volatile going forward? Because if you look at it historically, your obtained rates have been far less volatile compared to most of these rate indices.

So it depends on what time horizon you have, Lars, because if you're thinking in a matter of weeks or quarters or years, I think that these bottlenecks that we're up against on the land side, they will appear and resorb themselves as seasonality and trade growth and shifts and new capacity comes online and so on. So there will not be a constant feature where the rates are just high for longer. And as some of these bottlenecks disappear, then the rates will normalize as they appear somewhere else, they will shoot up again. I think what will be a feature is continued volatility on the rates over the coming years. But with a higher average than what we have seen because of the frequency at which these bottlenecks start to urge. I think that we're moving into something where what constrains or determines the rate levels is more the inland capacity to absorb the volumes that we bring with our ships more than how many ships we put in the water.

The next question is from Alexia Dogani, JP Morgan. Please go ahead.

Yeah, good morning. I'm slightly surprised as an observation the big shift in narrative compared to last quarter because now we're talking a lot about structural changes in the market, trade imbalance is persisting, needing more ships, given kind of poor congestion, What has fundamentally changed? And specifically, I don't quite understand why household volume growth has been so strong, especially, let's say, Asia to Europe. Can you explain to us what kind of sector verticals are really growing? What has really driven that kind of step change? Because, you know, we can see typhoons impacting congestion in Asia. Really, my observation is that demand has accelerated substantially. What has driven this substantial acceleration in demand in your view? Given your comment just now, should we therefore be thinking that the order book of 40% could actually go towards 60%, which is the peak the industry saw in 2009? Thanks.

Thank you, Alexa. I think I'm also surprised by and what surprises me is the strength and the resilience of market demand. I think our imagination at least has been constrained by all the talks about trade wars and de-globalization and by the view that the Iran conflict would unleash an energy crisis that would have also negative impact on global demand. Despite years of talk about deglobalization and despite the uncertainty around oil prices, what we have seen is that demand for container transport is basically shrugging off all of that and you see no sign in the number that any of that deglobalization talk or any of that energy crisis is actually denting demand level. For me, compared to where I was three months ago, that's a key thing that has changed. It seems that the market is so resilient that it can shrug off these shocks and keep on pumping volumes at an unchanged level. That's the first thing. The second thing is the compounding effect of having three years in a row of strong growth, which is only one way, basically, in trade flows. And we've been looking at strong growth, but I think we've only started to realize what one-way trade growth means for landside infrastructure. Because if only you import growth, You basically need two trucking moves per every import rather than have one trucking move for an import and one trucking move for an export. So you need more trucking powers just to meet the same amount. You need more terminal capacity because you have more empties that you need to remove. So I think there is a compounding effect there. which which is hitting some limitations because there has been a relatively subdued view towards how much the market was going to grow and so how much infrastructure investments you would need on the land side and we've not put enough terminal capacity trucking power has been an issue for a long time some of the waterways especially in europe right now are severely affected by uh you know water levels and and other issues and all of these The other thing that is changing is actually what we're moving. So what is in the container is gradually changing. For a long time, The main feature of what we were moving from the forest was what we would call general department store goods. Anything from furniture, footwear, clothing, foodstuffs, stuff like that, that was very, very subject to conjuncture and consumption. What we have seen since COVID As the exports from the Far East have boomed, we're seeing a lot of, it's more the industrials that are actually driving the growth. And it is anything that is related to electrification from storage, so batteries. Solar panels. Parts for either solar panels, windmills, turbines, grid, electricity grid, anything that has to do with electrification. Cooling units for data centers and other things. EVs. So anything that has to do around electrification and the race to build more power capacity is driving demand for industrial products whose production base is very Asia-centric and Asia-dependent. And that is a lot less subject to conjuncture than what you have, because if you have a big contract to build a big sun park, whether there is a higher oil price or not, you're going to need to move the solar panels and the infrastructure to get that sun park built. I think something that for me is a shift. We will become less seasonal and more subject to industrial verticals as long as this macro trend will continue to materialize. And this is not only a US issue. This is Europe, this is India, this is the Middle East, this is Latin America, this is Africa. We see this across the whole world, where large Asian companies are exporting more and more of these components into those geographies and those markets. What all of this means is, I still think that the order book reflects a very optimistic view on the world, but I think so less and less as long as this trend continues. Because if I have a total market growing 4%, but the head-hold demand growing 7-8%, I need 7-8% capacity more every year just to be able to carry stuff. And so I don't know where the order book is going to end, but I think that this is less of a constraining factor, and I'm actually more looking now at how quickly are some of the nodes that are most stressed in the network, how quickly can these bottlenecks be resolved, and I would say If you look at Santos, if you look at Apapa in Nigeria, if you look at the north continent of Europe, if you look at the UK, if you look at other places in the market, those are not easy bottlenecks to resolve and it's going to take a while. They have been building up for 15 years and it will take a while to undo them.

Vincent, if you allow me to follow up, just on the electrification theme and kind of the industrial goods, obviously we're hearing that some companies are mentioning pre-buying because prices for those goods will come up because of kind of energy costs affecting their production. Do you think that has happened or not? Or is it just fundamental demand? Or is there some pre-buying?

All that preponderance before tariffs and all of these gaming trades, I don't see any sign of it in any of that. I think that you have a macro trend now where people have gone from worrying about electricity as a green transition into worrying about electricity availability because every market needs more and more electricity. If you need more air conditioning, you need more electricity. If you have more EVs, you need more electricity. So it's gone from is it moving from black to green energy into we need more energy and therefore we need to build up the energy infrastructure of the future. And that we're seeing again in all of the markets. I don't think it will necessarily be linear and there will not be a lull here or a lull there, but I think we're probably going to see a pretty sustained growth in those verticals for the years to come.

Thank you.

The next question is from Jacob Lax, Wolfer Research. Please go ahead.

Hi, good morning. Thanks for your time. So could you maybe speak about how you're thinking about unit costs from here? How meaningful can the return to the Red Sea be in driving these lower? And then any other big puts or takes we should be keeping in mind over the balance of the year? Thank you.

Yeah, thank you, Jacob. So our opinion is that at this stage, a return to the Red Sea will have Very little pricing impact and we'll have a positive cost impact obviously for the short sailing distances and lower cost of going into a straight route versus all around Africa. And the reason why we think it's not very significant on prices but it's significant on cost, on cost I just explained, on prices it's because we see the bottlenecks being elsewhere and therefore It's not really going to have a material impact on prices. And as long as the safety requirements are met, this is the type of market that is good for a return rather than at once where there was no bottleneck.

Thanks. And are there any other sort of big puts or takes we should be keeping in mind as it relates to unit costs for the rest of the year?

Yeah, so I think there are two things that you should keep. First of all, oil price is still obviously a big factor, depending on what reserves are at, what consumption is at, whether Hormuz opens or doesn't reopen. You know, we have seen some increased volatility in oil prices, which in the short term, I mean, in the long term, I think we're pretty well covered with our bunker formulas with the contracts, but in the short term could have some impact on how we think about the unit cost. and then higher rate environment tends to lead to also longer charter or longer higher charter markets for the ships that we charter or lease and we've seen this if you look at the publicly available data in terms of fixtures and prices of those fixtures the prices continue to be high and the fixtures actually go for longer as owners take advantage of the shortage that there is a ship in the current market The next question is from Ulrich Beck, Danske Bank. Please go ahead.

Yes, thank you for taking my question. It's on the discrepancy in your guidance upgrade between EBITDA and EBIT, which are increased by 2.5 billion, while the free cash flow guidance is 1 billion. So if you could please explain that, Delta, also considering that you keep your CapEx guidance unchanged. And on that last point, given that you now indicate that you may need to increase your capacity in four years, why do you keep CapEx?

Thank you. I might take that one. As you explained, obviously in the free cash flow, mainly driven by what we have seen in Ocean, we have to consider that we also carry a much higher working capital. That is due to the fact that our rates went up, so the billing to the customer went up, so that drives a higher We have more working capital cost, mainly driven by higher receivables, and then we have also more working capital carried by higher bunker costs, so basically inventory that we have on the balance sheet. That inventory costs more due to higher bunker price costs. Does that explain the question?

Yes, very clear, but then also the CAPEX side.

On CAPEX, at least for the quarter, there was not really a change. I think we are right now running a little below what we have targeted, but again, that we cannot charge on a quarterly basis. For the full year, the guidance stays as it is.

The next and last question is from Jack Rayburn, Bank of America. Please go ahead.

Jack Rayburn Good morning. Congratulations on results. I'm just trying to understand the circumstances you've forecasted for the bottom and the top end of your guide. For the low end, is it simply easing congestion and how likely could that actually be in the next few months given the lack of terminal capacity you've cited? And connected to that, would fully reopening the Red Sea not exacerbate congestion issues which could actually be supportive for rates in the short term, at least for the rest of this year? Thank you.

Thank you, Jack. So you're correct. For the lower end of the guidance, you would need to see an easing of congestion basically around the first week of the beginning of the fourth quarter there in connection with the Golden Week holidays in China and that it would last into the fourth quarter. You are correct also that the return through sewers in the short term is likely to exacerbate some of these bottlenecks rather than help alleviate them, at least at destination, especially in Europe. And I think that answers both questions. I think for the upper end of the guidance, it's the opposite, right? If demand continues strong and some of these congestions endure, then you would see a more favorable development in the fourth quarter.

Everything remains set as Paribus in the Red Sea and you do go back in. Would that not be included in your circumstances at the high end of the guide then because you get that congestion-related rate increase?

I think the congestion-related rate increase is a function of what the whole market would have to do. I think we're managing this very carefully, one service at a time, exactly not to completely collapse the facilities that we utilize because then that would put us at a serious disadvantage compared to competition. But if the market was to move quite suddenly back through the Red Sea, then this would put a more general pressure on that. And how this translates into prices, I don't know, because it depends on how the situation would evolve, but it would create an upside probably to some of the rates, possibly.

Perfect. Thank you very much. Ladies and gentlemen, this concludes our Q&A session. I would now like to turn the conference back over to Vincent Clerc for any closing remarks.

Well, thank you again for joining us today and thank you for the great questions and discussions. To summarize, we had a really strong quarter with all our key businesses performing well. We demonstrated agility in our operations against the backdrop of a strong container market and many disruptions, allowing us to capture both volumes and the benefit of the higher spot rates, driving higher earnings in ocean. Logistics and services continued to build momentum. It delivered strong top-line growth and another quarter of margin improvements with plans in action to further improve on the margin front. The strong trajectory in terminals continues with good earnings and returns while undertaking significant investments positioning the business for future growth. Taking a broader look at the ocean industry, the combination of strong demand and tight port capacity is becoming a structural feature of the market, making the rate environment more benign, albeit still very volatile. As you have seen, this has led to an upgrade of our full-year guidance. Results like the one of this past quarter do not happen accidentally. They are the result of the capabilities, hard work and commitment of all our colleagues at Maersk. I would also like to thank our customers for their continued support and trust to keep their supply chains moving. And with that, thank you for your attention and see you soon.